In September 2024, Japan's stock markets have shown robust performance, with the Nikkei 225 Index gaining 3.1% and the broader TOPIX Index up 2.8%, partly driven by a weaker yen following the U.S. Federal Reserve's significant rate cut. Amid this favorable backdrop, investors are increasingly focusing on growth companies with high insider ownership as potential opportunities for strong returns. High insider ownership often indicates that those who know the company best—its executives and directors—have confidence in its future prospects, making these stocks particularly appealing in today's market environment.
Top 10 Growth Companies With High Insider Ownership In Japan
Overview: Rakuten Group, Inc. operates in e-commerce, fintech, digital content, and communications both in Japan and internationally with a market cap of ￥2.07 trillion.
Operations: The company's revenue segments are composed of Mobile (￥382.95 million), Fin Tech (￥772.29 million), and Internet Services (￥1.24 billion).
Insider Ownership: 17.3%
Earnings Growth Forecast: 82.3% p.a.
Rakuten Group, a growth company with high insider ownership, is forecast to achieve revenue growth of 7.6% per year, outpacing the Japanese market's 4.3%. Despite its volatile share price and trading at 89.3% below estimated fair value, Rakuten is expected to become profitable within three years with an annual earnings growth rate of 82.35%. However, its Return on Equity is projected to be low at 9.6%. Recent Q2 earnings call on August 9th highlighted ongoing financial developments.
Overview: Lasertec Corporation designs, manufactures, and sells inspection and measurement equipment both in Japan and internationally, with a market cap of ￥2.17 trillion.
Operations: The company's revenue segment primarily focuses on inspection and measurement equipment, generating ￥213.51 billion.
Insider Ownership: 11.8%
Earnings Growth Forecast: 18.1% p.a.
Lasertec's earnings are forecast to grow at 18.1% annually, outpacing the Japanese market's 8.6%, while revenue is expected to increase by 15.3% per year. Despite recent volatility, analysts agree on a potential stock price rise of 47.8%. Lasertec's new SICA108 model aims to enhance SiC wafer inspection, addressing manufacturing challenges and improving quality analysis with lower costs. Significant insider ownership aligns management interests with shareholders' growth expectations.
Overview: Capcom Co., Ltd. is a company that plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally with a market cap of ￥1.40 trillion.
Operations: Revenue segments include Digital Content at ￥103.38 billion, Amusement Facilities at ￥20.09 billion, and Amusement Equipment at ￥10.34 billion.
Insider Ownership: 11.5%
Earnings Growth Forecast: 14.5% p.a.
Capcom's earnings are forecast to grow at 14.46% annually, surpassing the Japanese market's 8.6%, while revenue is expected to increase by 9.5% per year, outpacing the market's 4.3%. Despite recent share price volatility, substantial insider ownership aligns management interests with shareholders' growth expectations. The upcoming Q1 2025 earnings call on July 29, 2024, may provide further insights into their performance trajectory and strategic initiatives for sustained growth in a competitive industry.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.The analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years.
Companies discussed in this article include TSE:4755 TSE:6920 and TSE:9697.
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